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N.H. Senate, House committees to hear possible MET amendments today

After weeks of working on solutions to the possible loss of millions in state revenue from a controversial hospital tax, House and Senate lawmakers are set to share their plans today. But the two chambers will bring different plans to the table.

Both the House and Senate Ways and Means committees will hold hearings on the plans today, with House members hearing at least two plans and senators at least one. The House amendments were released yesterday, and a Senate amendment will be presented to the committee this morning.

Two lower court rulings bringing the state’s Medicaid Enhancement Tax into question are jeopardizing millions in state revenue. In this biennium, for example, the state is expected to bring in $145.9 million from the tax. The courts deemed it unconstitutional, in part, because it’s levied only on services provided by inpatient and outpatient hospitals. A hospital providing physical therapy, for example, would be taxed on the service, while a nonhospital physical therapy facility wouldn’t be.

Hospitals have been paying the tax since 1991 but used to get back all of the money through the state’s rigging of a federal reimbursement system that sent dollars back to hospitals and into the state’s general fund. The federal government recently began tightening the reimbursement rules, however, and the state cut back on the return payments to hospitals in 2011, causing some hospitals to look closer at the tax and challenge it in court.

The state likely is going to appeal the rulings to the state Supreme Court. But in the meantime, the rulings are forcing lawmakers to deal with what’s long been an ignored issue.

An amendment from Rep. Cindy Rosenwald, a Nashua Democrat, seeks to clarify why the state believes it’s fair to tax inpatient and outpatient hospital services and nothing else. (Under federal law, state’s can levy hospital taxes in 19 categories, including physician services, dental services, chiropractic services and more.) Her amendment changes some language in state law to distinguish the tax as being on “hospital services,” not “patient care.”

“We think the court’s got it wrong,” Rosenwald said.

The money collected through the tax goes into an uncompensated care fund. Rosenwald’s amendment says any money in that fund must be used for public assistance programs and none of it can go into the general fund. Her amendment does not change who is being taxed or at what rate, so there is no net impact on the budget, she said.

An amendment by Rep. David Hess, a Hooksett Republican, is also revenue neutral, but it taxes more people at a lower rate. Right now, the tax is 5.5 percent on inpatient and outpatient services. His amendment would broaden the tax to include more of those 19 categories and drop the rate to 5 percent. It still exempts some services such as mental health care, nursing homes and providers of private-duty nursing services.

The House Ways and Means Committee will hear both of these amendments at 2 p.m. The Senate will hear an amendment from Senate President Chuck Morse, a Salem Republican, at 9 a.m.

The deadline to act on bills from the other chamber is May 15. If House and Senate members can’t agree on a bill by that date, they will go to a committee of conference.

(Kathleen Ronayne can be reached at 369-3309 or or on Twitter @kronayne.)

Legacy Comments4

Now that we have heard from our resident mynah bird........... The issue here yet again is an oldy but goody. Some 19th century hold-outs fail to see that we have relied on trickery and financial games to fund our State as well as the constant raising of our property taxes. We rail against spending by Washington, but has anyone looked at just how much the states in turn rely on this "free" money? Here again we want to create a new kinder fairer tax for possibly 19 medical services. Now when that gets passed back to us in higher rates the first finger will point at Obamacare. Some say to just stop spending. Well in this case the money is technically already spent. That's what happens when you balance a budget on estimated revenue. Now yes we should be frugal, but unless you have been living under a rock, NH is just that. But the budget has skyrocketed. Well my first VW cost me $1,700 and change in 1972, today they are near $18,000. Everything costs more, everything................... So instead of raising property taxes, it may be the time to look at alternatives. A revenue stream based on what you earn, as opposed to one based on what you own - a novel and more equitable solution from where I sit. PBR that revenue stream line was just for you. Apparently the word tax is ugly.

There are no metrics that you can cite that can possibly account for the massive rocketing expenditures by the democrats - NONE - not population, not inflation, not CPR - none zero nada - just every year more of the cradle to grave gimmie society fostered by the democrats

Tax is ugly as it is never ending. Taxes were necessary for essential services, road, dams and other public works projects. But, politicians on both sides of the aisle find neverending ways to spend of all sorts of things that are really not the role of government. Not surprised that you own a VW, do you have a beard and wire rimmed glasses as well? LOL. Seriously, I would go for a sales tax exempting clothes, prescriptions, groceries, etc. BUT IF and only if we earmark the money for necessities and no fluff programs like "Safe Routes to School" or some pet project that serves certain groups. Then set a 5% cap on spending year over year, legislate that property taxes can never be used to fund schools or state programs again and can only be raised 1% per year without a vote of the town. Finally, a top to bottom audit of all state jobs and build efficiency into the system. Also a check for nepotism....there should be none. In other words, some adult responsibility.

SOLUTION - STOP SPENDING !!!!!. Since democrat Shaheen was elected the democrats have doubled state spending - heck - just since democrat Lynch was elected the democrats took spending from 8 billion to $$$$$$$$ 11.4 BILLION !!!! - the NH population simply did not grow in proportion the the democrats massive bloated BIG govt spending.

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